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(Depreciation—Change in Estimate) Machinery purchased for $60,000 by Tom Brady Co. in 2013 was originally estimated to have a life of 8 years with a salvage value of $4,000 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2018, it is determined that the total estimated life should be 10 years with a salvage value of $4,500 at the end of that time. Assume straight-line depreciation.Instructions(a) Prepare the entry to correct the prior years’ depreciation, if necessary.(b) Prepare the entry to record depreciation for 2018.

(Depreciation—Change in Estimate) Machinery purchased for $60,000 by Tom Brady Co. in 2013 was originally estimated to have a life of 8 years with a salvage value of $4,000 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2018, it is determined that the total estimated life should be 10 years with a salvage value of $4,500 at the end of that time. Assume straight-line depreciation.Instructions(a) Prepare the entry to correct the prior years’ depreciation, if necessary.(b) Prepare the entry to record depreciation for 2018.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(Depreciation—Change in Estimate) Machinery purchased for $60,000 by Tom Brady Co. in 2013 was originally estimated to have a life of 8 years with a salvage value of $4,000 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2018, it is determined that the total estimated life should be 10 years with a salvage value of $4,500 at the end of that time. Assume straight-line depreciation.
Instructions
(a) Prepare the entry to correct the prior years’ depreciation, if necessary.
(b) Prepare the entry to record depreciation for 2018.

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